Distributed PV Still Be Mainstream of Market Short-term

 The world is using more and more solar energy; of that there is no doubt. But solar comes in many sizes and shapes. Which will prevail in the coming five or 10 years?

This is a legitimate question because today’s solar industry is a study in extremes. Massive concentrating solar plants give deserts a futuristic feel and promise thousands of megawatts to power cities. At the same time, tiny photovoltaic cells installed in clothing provide just enough energy for a person’s mobile phone. With its ability to produce useful energy on both a small and large scale, solar holds an enviable position in the renewable energy market. We can’t walk around holding windmills to charge our iPods, nor do we build biomass plants in our backyards to warm our swimming pools. Solar, on the other hand, permeates our electricity system from gadget through grid-scale. And, despite the dazzle of these technologies, old-fashioned rooftop solar continues to be the industry mainstay.

"In the electricity business, we see some practical constraints pushing solar power into several niche sizes. We expect the market to offer ever more specialised products that focus their benefits on these size ranges," says Michael Gorton, CEO of Texas-based Principal Solar. The PV industry has experienced nothing short of a spectacular rise in recent years, even as the economy sputtered. PV installations increased 16-fold worldwide from 2005 to 2011, according to the report published by Photon Consulting. In Europe, Germany, Spain and Italy have led the way.  Germany alone is expected to have 25 GW installed by the end of this year, which is equal to 15%-20 percent of its electric capacity and about 30% of peak load, according to the Massachusetts-based research firm.

Yet not everyone agrees on exactly what’s ahead for the various sizes and types of solar. Two types – distributed generation and utility-scale projects – face some of the greatest market rivalry.  Distributed generation tends to be placed on the roofs of homes and businesses, while utility-scale projects are often built on the ground. And, while rooftop solar predominantly feeds power to a building, utility-scale projects tend to serve the larger electric grid. Rooftop systems, of course, produce less energy.

Why the market rivalry? Barry Cinnamon, CEO of Westinghouse Solar, points out that utilities clearly benefit from one form and not the other. Utility-scale projects boost the utility’s bottom line, add to the rate base and increase the amount of generation utilities have available for sale to customers. Smaller, distributed systems on rooftops, on the other hand, have the opposite effect. After homeowners install rooftop solar, they buy less power from the utility. "All solar is good but there is a little bit of conflict between those two models," Cinnamon says. "It is a zero-sum game. You save utility electricity by installing solar on your roof; you don’t buy it from the utility."

Despite some utility resistance to rooftop solar, it continues to grow in popularity. California, for example, reported a 47 percent rise in rooftop solar in 2010 and is on track for another record-setting year in 2011. In Germany small distributed capacity, most of it solar, increased 132 percent last year. Italy, France and the Czech Republic also saw dramatic growth. China is pushing for 3 GW of rooftop solar by 2015.

PvXchange is well positioned to monitor international solar trends. The Berlin-based brokerage and online trading platform connects 7,500 buyers and sellers of solar components. Founded in 2004, the company trades solar modules, inverters and complete systems. "In Europe, especially Italy and Germany, the vast majority of installations and total capacity is in commercial distributed generation," says Elliott Gansner, PvXchange’s general manager for North America.Rooftop solar, especially systems of 100 kW or less, make up the preponderance of installations in Germany, he says. In the early part of the last decade, Germany focused mostly on residential development. Then, once the solar market "found its feet and started growing" more ground-mounted solar systems were built, many in the form of large projects — utility-scale systems that feed the grid, rather than distributed generation. "And for a while there was quite bit of that. But quickly in Germany you saw a move away from that and back to rooftop," he says.  In fact, the German feed-in tariff does not offer any incentives for ground mount.

What’s driving today’s push for utility scale solar in the U.S.? The federal government in 2008 began letting utilities earn a 30 percent federal tax credit, which they had previously been denied. In addition, U.S. utilities are increasingly building large power projects, or at least contracting with them, in states with aggressive renewable portfolio standards—requirements that a percentage of power come from green energy by specific dates. In addition, liberalised states are increasingly easing rules that prohibit utilities from building and owning generating plants, at least when it comes to renewable energy. Massachusetts, for example, passed a law in 2008 that lets utilities now own and operate up to 50 MW of solar. In June 2011 Connecticut passed a similar exception to its liberalisation rules, and now lets utilities own up to 30 MW of renewable generation.

So with this kind of motivation for utilities, why do Gansner and other believe that distributed generation will ultimately win out over utility-scale projects? When it comes to solar energy, economies of scale tend to emerge in a somewhat counterintuitive fashion. We think that one large entity offers greater efficiency than many small ones; that is, a centralized power plant delivers energy most cost-effectively. That’s a notion we need to abandon, according to Gansner.When it comes to solar, distributed generation offers the greatest efficiency, Gansner says. Not only does it avert the need for new transmission lines, but also offers an easy way to install many small power plants, one that bypasses the hassle of regulatory approval. "Solar distributed generation is an ideal technology for modular application. It is easy to install lots of small systems. "

With panel prices dropping, the industry is now setting its sights on lowering the cost of installing panels, and several new technologies and techniques are emerging. For example, Zep Solar, with offices in Germany and the US, offers technology designed to reduce installation costs. The first step for ground-mount or roof installations, almost without exception, is placement of long sets of aluminium rails. This consumes a lot of time and natural resources. Zep does away with the aluminium rails used as mounting blocks for conventional solar panels and instead offers a trackless approach for both distributed generation and utility-scale projects. Zep says that its system, which uses panels that mount by way of a built-in groove, cuts residential installation costs by 30 – 50 U.S. cents/watt and speeds installation time by a factor of five. Such rail-free systems eliminate the time spent on installation, but also cut the costs of shipping the aluminum rails, say proponents of the approach. Other companies are foregoing the traditional solar panel and integrating solar directly into elements of the building, such as rooftop shingles, or in the case of Australia-based Dyesol, windows. The technology becoming strong and prevalent in the marketplace in the next five to 10 years as building owners become increasingly concerned about utility costs and energy self-sufficiency, a trend he says will spur distributed generation overall.

So far now, it appears that PV as distributed generation, the kind found on the roofs of homes and businesses, will continue to be the bedrock of the solar industry，and together these various technologies will reach into all corners of world. Solar technology and industry have stepped into the flourishing period from the development period,a large-scale use of solar energy has begun. Where there is light, there will be solar.